The Markets Now: Apple Falls After Foxconn Hiring Freeze
Office Depot and OfficeMax make their merger deal official. Plus, health insurer stocks continue to fall.
Stocks stayed mostly flat Wednesday after the release of mixed economic reports and more merger news.
In economic news, the ICSC-Goldman Store Sales index increased 2.7% compared to the weak year-on-year rate of 1.8%. Housing starts fell 8.5% in January. The northeast and midwest regions' housing starts fell at a monthly rate of 35.3% and 50% respectively. The producer price index rose 0.2% and food inflation increased 0.7% in January. The index rebounded after it fell 0.3% in December.
Investors are asking that JPMorgan Chase (NYSE:JPM) separate the chairman and chief executive officer positions, both held by Jamie Dimon, in an effort to hold the executive more accountable. The American Federation of State, County and Municipal Employees, a public employee union, is also supporting the resolution. Shares inched down 0.59% to $49.14.
Office Depot (NYSE:ODP) and OfficeMax (NYSE:OMX) will merge in a $1.2 billion deal after talks between the two office supply retailers were reported yesterday. Office Depot shares sank 7.67% to $4.64 and OfficeMax shares moved up 1.85% to $13.24.
Apple (NASDAQ:AAPL) fell 1.77% to $451.77 after its manufacturer, Foxconn Technology Group (TPE:2354), said it would freeze hiring until the end of March. In other Apple news, the tech giant said that a small number of employees' computers were hacked but that no major security breach occurred. As was the case with Facebook (NASDAQ:FB), the hack was caused by employees visiting a developer website.
The Federal Bureau of Investigation is looking into an options trade that was made before Berkshire Hathaway's (NYSE:BRK.A) buyout of Heinz (NYSE:HNZ). An investor's speculation that Heinz shares would reach 8.1% in June attracted the attention of the FBI and Securities and Exchange Commission. Its stock fell 0.08% to $72.14.
Boeing (NYSE:BA) union engineers could strike over retirement benefits. Boeing is trying to fix to its 787 Dreamliner planes, which were grounded due to problems with its batteries. Shares rose 1.54% to $75.81.
Garmin Ltd. (NASDAQ:GRMN) posted fourth-quarter earnings of $129 million compared with $165 million a year earlier. The company had predicted 2013 earnings of $2.5 billion to $2.6 billion, below analyst expectations of $2.76 billion. Its stock rose 10.68% to $35.05.
Dell (NASDAQ:DELL) reported a 31% drop in profit and 11% drop in revenue for the fiscal fourth quarter. Lower than expected earnings would not fuel efforts to up the offer price in Dell's buyout deal. Shares edged up 0.22% to $13.84.
Luxury home builder Toll Brothers (NYSE:TOL) posted higher revenue, at $424.6 million, rising 32% from last year. It also reported a profit of $4.4 million compared to a loss of $2.8 million a year ago. Its stock sank 4.34% to $35.30.
Perry Ellis International (NASDAQ:PERY) projected a fourth-quarter profit of between $0.48 and $0.50 per share and revenue near $258 million compared to Wall Street expectations of $0.84 per share and $280 million in revenue. Its stock rose 3.45% to $17.35.
Red Robin Gourmet Burgers (NASDAQ:RRGB) shares fell 2.54% to $42.28 despite posting fourth-quarter earnings that doubled in comparison to 2011. The restaurant chain reported a profit of $6.49 million or $0.45 per share compared to $2.91 million or $0.20 per share a year ago.
Regal Entertainment (NYSE:RGC) agreed to buy out Hollywood Theatres, a chain that operates 43 theatres, for $191 million. Shares edged up 0.19% to $15.87.
Insurers Humana (NYSE:HUM) and UnitedHealth (NYSE:UNH) continued to fall after the government announced that Medicare average rates in 2014 would be lower than expected. Humana stock fell 0.62% to $72.56 and UnitedHealth moved down 1.64% to $55.73.
Medtronic's (NYSE:MDT) third-quarter earnings went up almost 6% and net income increased to $988 million or $0.97 per share from $935 million or $0.88 per share a year ago. Sales of heart defibrillators fell, however, to $459 million from $467 million. Shares fell 2.12% to $44.83.
Home builders Lennar (NYSE:LEN) and D.H. Horton (NYSE:DHI) saw shares fall after gloomy news from the housing market index yesterday. Lennar fell 3.33% to $38.58 and D.H. Horton moved down 3.91% to $22.38.